Saturday, June 4, 2016

Social Entrepreneurship: Understanding India

Based on a conversation with Rahul Dev, Managing Trustee, Samyak Foundation, Former Editor, Jansatta(Indian Express Group), Aaj Tak, ZEE News & a well known face on the Indian TV Channels as a special invitee on major national issues.
The Social Entrepreneurs need a differentiated model for India. “An economically and socially sustainable social enterprise for India would need a deep understanding of India from a social & cultural perspective” said Rahul Dev. When the Indian markets opened in the nineties, several MNCs had failed with their global branding models. Michael Jackson had to be replaced by Juhi Chawla in the Pepsi ads, and the Pepsi team soon realized that the southern part of India had its own film icons. The common factor, however, was cricket in Pepsi Ads later on, which is like a national religion uniting the entire nation. The global players soon understood that India was different from the rest of the world due to its complex cultural and social diversity. Social Entrepreneurs too have a lot to learn from these experiences.
According to Census of India of 2001, India has 122 major languages and 1599 other languages. With so many recognized languages, India is indeed a highly fragmented market. A Social Enterprise even if it is for profit would need to have societal support to succeed. Operation Flood launched by the National Dairy Development Board (NDDB) succeeded in transforming India from a milk deficient country to a milk surplus country due to its connectivity and understanding of socio-economic linkages and relationships apart from local culture at the grass roots level. This understanding has created such strong brand equity for Amul that even the MNCs have failed to dislodge it from its No 1 position in spite of investing huge resources at their command. To understand India in the context of social enterprise we need to go back in time for a better understanding of the strengths, weaknesses, opportunities & threats. Only then, we can look forward to creating sustainable models for the road ahead from where India stands today.
Till about 200 years ago the Indian model of entrepreneurship was based on an age old system of castes and communities. Communities and sub-communities often specialized in specific businesses, trades and sectors, having learnt and honed up their practices and skills with great success over hundreds of years. These communities, while competing in the market place with their competitors, supported and nurtured their young members in setting out as entrepreneurs by way of contributions in cash and kind. Kinships were prized and rewarded. Many of these communities not only did business within India but they also traded with the rest of the world which had given them a global vision for their businesses. Successive rulers till the time of the Mughals protected and nurtured these communities and they too supported the rulers with huge amounts of wealth. The State was there to support enterprise and not to curb it through too many regulations and interventions.
This system was shaken up with the arrival of the East India Company whose main objective was to take over and control the Indian business system in a way that they would be the sole gainers. Old systems were systematically decimated through political domination and legal regulation which in certain parts of India went to the extent of replacing food crops with commercial cultivation which could help the British Empire in producing more clothes and help in dominating the global markets. English became the language of the elite and the masses were discriminated on the basis of language, caste & class. They were treated with contempt by the elite classes. The damage was so deep that India is still struggling to recover and restructure to meet the challenges of our times. With this background in mind let’s look at some of the key points a Social Entrepreneur should include in his or her strategic planning for India:
1.Community Engagement Model
Community platforms provide a very cost effective as well as powerful means of connecting with India at the grass root level. One has only do a little bit of research to find out the various caste, religion, geography and profession based communities. These platforms will provide connectivity, knowledge, skills and opportunities to recruit volunteers for social causes. These platforms can also provide an excellent opportunity for low cost communication models.
Just a few years back, I had used this model to launch the Rockland Hospital in Dwarka, Delhi, by organizing a Bhandara (community lunch after religious prayers), for the Rickshaw Pullers who were served by the Resident Welfare Association (RWA) members, local village heads, chemists and doctors. Rickshaw pullers were chosen as in Dwarka they were found to be the best source for locating a place, specially in an emergency. In India, the food suppliers as well as the tent & chair suppliers give a huge discount as a part of their contribution for Bhandara.
The results surprised everyone as against a marketing & communication budget of Rs 75 Lakhs; the cost came to a mere Rs 68,500. Message reached maximum numbers through just one event. What was even more significant that the community volunteers came out in large numbers to ensure that it was a success which could have beaten any experiential marketing technique.
2.Hyper Local Leadership For Diversity Management
The example above clearly illustrates the value of having local leaders who understand the community’s psychology and behaviour. Copy pasting an idea would have cost Rockland Hospital a huge amount and that too without any bonding with the local community. There is an old saying in India that the language and the taste of water changes every few miles in India (कोस-कोस पर बदले पानी, चार कोस पर वाणी). This saying is for explaining the diversity of India. It will be too costly to employ people to cover such a vast country; therefore getting connected with the local opinion leaders is the right way forward. There is no dearth of volunteer ship and the tendency to help others by sharing knowledge and donating time for a cause are very much present in our social system. All that is needed is to understand the value of connecting at the ground level and giving the local opinion leaders the respect they deserve.
3.Value of Patience
India is a democracy so everything is debated; often fiercely. But once people agree on something the world is surprised at the results. In the sixties food shortages were so extreme that our leaders had to go with a begging bowl to the developed nations for food. India was a country with huge milk and egg shortages. For many; the India story was over. It was called a dark era. But India rose as one nation and rewrote a completely new story in the seventies by becoming the world’s largest producer of milk, became self-sufficient in food, liberated Bangla Desh in spite of threats from a super power and exploded a nuclear bomb to assert its rightful place in the new world order.
We were again written off in the eighties due to terrorism and collapse of the economic order resulting in India using its gold reserves to save its face on loan default to the IMF. With the assassination of a mighty leader like Indira Gandhi, the Prime Minister of India it appeared as the nation was leaderless. But India rose again with a roar as an IT Super Power and opened up its markets to teach the world news lessons in managing businesses by managing diversity. When 1.2 billion people make up their minds, India leaps forward like no other nation. India has a decade trap so those wanting to create a successful enterprise in India need lots of patience to be able to survive and sustain for a period that can range between 5 to 10 years. This has happened in several sector like Auto, Telecom, Information Technology and so on so patience is a necessary input for getting the desired output in India.
This is India’s Time
The whole world is looking at India as the land of opportunities. This is certainly a good time for India and all trends are turning green in its favour. For the first time, after a long gap of 30 years, Indians have elected a single party government with full majority after experimenting with several coalition governments. This is a significant change in the political thinking of the nation. With 356 million 10-24 year-olds, India has the world's largest youth population which does not even know that there was a time we did not have internet. This makes India a great source for talent and also makes it a huge market for products and services.
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Is purposelessness the new occupational hazard?





The Oxford dictionary defines occupational hazard as 'a risk accepted as a consequence of a particular occupation'.

Think of the occupational hazard associated with construction work, or mining industry, or, for that matter, night-time driving. The hazard could actually range from sleeplessness to losing life. Still there were people who have sacrificed almost everything to produce some of the most remarkable structures around and jaw-dropping sites. The recently commissioned Gotthard Base Tunnel is a case in point. That surely did involve occupational hazard, in spite of all the advancements made by science.
Now contrast this with the IT Services industry, which is sized at around $140 billion and employing over ten million people in India alone. Impressive figures, indeed. Another figure worth noting is the attrition rate- double digit, often touching 25 per cent.
Let's talk about some of the working conditions in such firms. Centralized air conditioning, no uniforms mandated, enormous flexibility on working hours and work timings, very handsome salaries, all amenities on campus, food courts, playgrounds, libraries, gyms, comfortable and ergonomic workplace, and frequent outings and workplace fun activities, just to name a few. Most of these avenues must be shocking for government employees or even for those working in the private sector manufacturing setup. For a change, let's talk to someone operating a blast furnace at Tata Steel in Jamshedpur during summers.
With all these and many more amenities, what could still justify such massive employee turnovers?
I reckon, there has to be something fundamentally amiss to continue to make people miserable in these otherwise wonderful settings. It seems that none of the external inducements, including some vulgar salary figures, manage to motivate people to stay back and 'work'.
Is it that employees are increasingly losing 'a sense of purpose'. Is it that they don't seem to understand 'why they are doing what they are doing'? My close interactions with folks in the IT services industry offers some ratification to this hunch, and I am not entirely wrong looking at the sorry state of the industry. And the phenomena may not be limited to this industry.
If talent is so mobile, how can anyone create something enduring? Stability is required at times. It's not just good for employee, but also for the industry at large, for, as in nature, creation calls for gestation.
So, I urge you to re-look at the 'occupation hazard' in the context of your workplace, and see if you have left the question of purposelessness unanswered for far too long!
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Thursday, June 2, 2016

Why Urban communities Need Computerized Modern Organizations



Mechanical organizations are not the same as innovation organizations. What's more, I don't simply imply that they have stepping stools. When you give the establishment to the way the world's frameworks work each day, you think in an unexpected way. Water frameworks, vitality frameworks, transportation frameworks, lighting frameworks all work for quite a while and require extremely mindful arranging about support, appointing, serviceability, and physical security that unadulterated innovation organizations don't need to consider. Mechanical organizations likewise assemble shared foundation that is interested in anybody affirmed by the city. That goes for both people and associations.

In my last post, I discussed the new sort of base required for computerized urban communities. Expansive arrangements of sensors attached to streetlights that were intended to be shared under the heading of city authority can enable another period of urban advancement. We can move from improving City Lobby work to unleashing the greater part of a city's subjects to help each other live, work and play better. Shared base makes value in open door for everybody from secondary school understudies to expansive organizations, in neighborhoods of different types. To really unravel for this present, it will take the work of computerized mechanical organizations.

Why? Above all else, mechanical organizations are experienced at putting genuine hardware in this present reality. When in doubt, we have significantly more stepping stools, instrument belts, can loaders and other hardware than most innovation organizations do. Furthermore, what we don't have in house, we have expansive arrangements of accomplices with those particular devices that have worked with us on mechanical activities for quite a long time. I know those sorts of "innovations" don't produce a ton of features, however like it or not, they are vital to making advanced urban communities. Also, the comprehension and eagerness to go into the road and keep up genuine physical hardware is fundamental to digitizing urban communities.

Innovation organizations don't introduce and oversee hardware like this as a feature of their DNA. Of course, every one of them can let you know how they assemble a custom arrangement and put sensors on sewer vent spreads to check for water stream levels (I was a piece of those groups as well!), yet it's a totally diverse creature when you are overseeing tens or a huge number of streetlights or securing power frameworks against interruption. This is the thing that mechanical organizations do each day.

Second, in light of the fact that mechanical organizations work in this present reality with genuine gear, they plan cloud innovation that is reason worked for getting information from these gadgets to the cloud secury. The GE motor controlling the plane I am on (one of the main spots I can discover time to sort these posts!) will create a normal of half of a terabyte of information for each flight. Gracious, and it moves from air terminal to air terminal, so recovering that information to the cloud for investigation isn't the most straightforward thing to do.

Innovation organizations exceed expectations at getting information starting with one framework then onto the next. In the event that you have to prepare a considerable measure of keeping money exchanges and break down patterns, you needn't bother with a modern organization. Be that as it may, in the event that you are a city pioneer that is going to convey physical sensors all over your city to engage the following urban innovation development, you certainly need the experience of a mechanical organization.

Third, mechanical organizations are upbeat to make open foundation that is shared. It's our main event. We are cheerful to have heaps of use sellers fabricate arrangements on our computerized base, as pervasive, open Drove installations.

We know we aren't specialists at taking care of numerous city issues, so we don't attempt to do it. We don't have ulterior thought processes of gathering individual information on people so we can publicize to them later. Our outline point is to make framework that enables a group. At GE, we've done it for more than 130 years.

Some innovation organizations need to offer you answers for each issue that you have. They need to be your one-stop-look for everything. While there are numerous solid innovation organizations, my conviction is that in the event that you unleash the inventiveness of your city, you will discover a lot of incredible arrangements and you will make employments and drive monetary development in the meantime. That takes open framework.

There are various new businesses that have extremely cool arrangements. I trust that large portions of these new businesses can figure out how to influence the modern advanced base to take care of fascinating issues.

I ought to bring up that as much as I solidly trust we require computerized modern organizations to send and secure base, I'm sure that enormous innovation organizations will keep on playing a noteworthy part in taking care of urban issues. Truth be told, I wager that their answers will improve and their capacity to help city pioneers will scale much quicker AFTER a computerized modern organization gives them the privilege physical base.

I adore innovation and will dependably be fascinated by the arrangements that bleeding edge innovation can empower. However, for city pioneers who are centered around unleashing the financial development open doors that urban tech holds, the main decision is a computerized modern organization with resilience that can give the open, secure, versatile base that urban areas require.
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Friday, May 13, 2016

5 real reasons why startups fail!

The immediate reaction once you know that you are in the phase of failing is to jump ship and head towards the first exit and disappear for a few years. This may arise due to the amount of money put into the startup that could have been used for lets say, having a fantastic time with family and friends, buying more property or simply relax till the end. What the heck is the end anyway?
From my point of view, we are not that breed. We come from a different lineage. We cannot stop when it's not hot. We need to move and make it happen. It maybe an addiction, but it is you see. It is the core of what we were put on earth for.

To make a difference, no matter what. If anyone reads this and says that they failed, I say that it isn't true. Why? Because, this is how it is supposed to be. Everything, the earth, stars, planets, rocks, the old man and the sea and your blooming business, is supposed to be in this state at this given point of time.

Your life is like a rubix cube. You will not understand it halfway, but because of natural algorithms, it was already set in play millions of years ago and again, you must understand it all comes right in the end. The following line maybe difficult to understand, but you will, when it is time - "Walk the path, don't think it, it will guide you. Once you start thinking then resistance emerges and you will go astray".

Now that we have digressed, we need to reel back to the 5 real points of why startups fail:
  1. No market - You need to understand that there has to be a whole lot of research that goes into finding out how and why you will succeed in the market. (Read Lean Startup)
  2. Lack of ownership - You cannot have a full fledged business and start a start up. That is just totally insane. You need to jump into a start up and stay there until you succeed or fail. No safety nets please, except for a money cushion.
  3. No cash - Do not get an office if you don't need one. Get an office and the works through the income that you earn from the business. Even then if you don't need one, don't get it. Overheads are like, you trying to kill yourself and acting stupid about it.
  4. Hire the wrong team - Don't hire a team if you don't need one right away. Once you hire, then you must hire a resource who takes over that particular responsibility completely, and they should do it much better than you can. You should not be there to guide them except in the beginning.
  5. Do it all yourself - Remember you cannot do it all yourself. It is a good thing that you know how to, but that's not the way to go. I remember that I tried to work all departments even though I hired resources. It just isn't right because you really need to learn the art of delegating work and responsibility. The question arises that if something is delegated then what if the person doesn't really do the job? This was something I battled the first time, but like I mentioned before, it all comes right in the end. Few bumps ahead initially and the road becomes smooth.
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Is "free shipping" in Indian e-commerce dying?

I remember, in early days of e-commerce, everyone used to talk about how e-commerce is far more efficient than physical retail because one doesn’t have the cost burden of physical stores. And therefore, e-commerce players can offer great discounts and free shipping by “passing on” these benefits to consumers. I guess everyone wanted to emulate Amazon, whose legendary head, Jeff Bezos, has repeatedly said that their only goal is to keep bringing down costs and pass on these benefits as reduced prices to consumers.
Now, as the pressure to improve P&L mounts, one is beginning to see some crucial changes in the way e-commerce business is conducted in India. We have seen Jabong shrink in size. Jabong’s Net Revenues, as reported by Rocket Internet in their 14th April 2016 filings, for Q4 of CY2015 were at Rs 218cr, down 19% YoY (yes, you read it right) versus Rs 271cr in Q4 CY2014. Total transactions in the same quarter for Jabong shrunk even more – 1.9 million v/s 3 million, which is shrinkage by 37%.
One of the headlines in recent news reports was Myntra’s categorical statement about systematic reduction of discounts – “1 percentage point every month”. This would, obviously, directly help reduce cash burn. Assuming Myntra has a monthly GMV of, say, USD 50 million, every 1% discount reduction would mean $6 million less funding requirement in one year. 5 percentage points reduction means $30 million less funding for the year, and that's a lot of capital saved.

That’s not the whole story though. Another important chapter of the story is the slow death of “free shipping”. A couple of years ago, everyone had Free Shipping as the norm - with no minimum purchase requirements. Then came the minimum purchase requirement, which varies across portals, for availing Free Shipping.

And in recent times, players have upped the charges for delivery. Myntra is one of the examples. In fashion e-commerce, typically, customers have a basket size of about Rs 1500. In this context, Myntra’s minimum order value requirement of Rs 999/- is significant. Also, the charges for order value below Rs 999 are now at Rs 149. Yes, you read it right, it is Rs 149/-. A player like YepMe, which serves more value-conscious consumers with merchandise that’s at the lower-end of pricing as compared to Myntra’s assortment, is now charging Rs 99/- for each order. No free shipping at all, no matter what’s your order value.

Now, this is a crucial development. It obviously helps players reduce their cash burn and helps them progress on the path to profitability. But for a consumer, this is quite a departure from the norm of “free shipping”. Most players continue to talk about free shipping with usual T&C applied, but looks like more and more shipments are now with delivery charges.
So how does the cash outlay for consumers change – I looked at a UCB t-shirt, which was available at 40% discount. But the math turns out as follows:
  1. MRP – Rs 1299/-
  2. Discount – Rs 520/- (@40% of MRP)
  3. Sub Total – Rs 779/- (@60% of MRP – so far so good)
  4. VAT/CST collected – Rs 39/- (@5% of the discounted price)
  5. Delivery Charges – Rs 149/- (whoa!!! That’s nearly 20% of the discounted price)
  6. Total payable – Rs 967/- (Hmm…..in effect, my discount is only Rs 366, i.e., 25% and not 40%)
So what started off as a 40% discount lure for a consumer, ends up at only 25% discount, unless the consumer decided to add something else to the cart to make it Rs 1000 or more in value terms.
An alternative approach would be to directly reduce the discount itself, instead of using the Delivery charge route, to improve order economics. I guess that’s more in-the-face of the consumer and has the risk of putting her/him off. And therefore, it seems that players have chosen to use the somewhat indirect route of delivery charge.

As for the big-three horizontal players (Flipkart, Snapdeal and Amazon), the range of shipment charges varies basis the seller or fulfillment option. Independent sellers on these marketplaces can, by-and-large, define their own delivery charge and indeed do so in many cases. For instance, a male t-shirt with net sale price of Rs 599-799 may have a delivery charge of Rs 30-70 by the seller. Similarly, women dresses with a sale price of below Rs 500 are being offered at delivery charges of Rs 30-75. These sellers mostly have fixed delivery charges basis each product and they don’t offer free delivery even with an increase in basket size/order value. So, 2 dresses of Rs 500 each would entail an Rs 100-150 delivery charge from such a seller! Adding a not-so-small 10-15% to the customer’s outlay.

One would have to wait and see how consumers react to this. But one thing is clear, the notion of Free Shipping is getting substantially redefined, if not dying entirely.
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